Tag Archives: Holacracy

Zappos, the Amazon subsidiary that sells shoes and clothing online announced that they would put an end to using traditional job posting boards. This is another big step away from traditional business actions that make Zappos a unique player in the marketplace. I think this action solves one of the biggest concerns I had for Zappos, but to understand why, we have to take a step back.

In January, Zappos announced that they would rid their company of managers and the traditional corporate hierarchy. The Las Vegas based company would move to a system called holacracy. Holacracy was developed as a system that depends on teams, rather that typical departments. This system also distributes authority throughout an organization unlike traditional top down systems and more recently popular bottom-up approaches. In order for this new system to work, teams must develop that can perform at a high level to complete projects using clearly defined processes, following clearly implemented governance and operations standards.

Holacracy.org has a really great graphic that encompasses everything that is part of an organization being a holacracy:

Zappos is growing quickly and had an identity that it didn’t want to lose. They saw this as a way to keep their character. They brought in Tony Hsieh to help move them forward under this new organizational structure.

“As we scaled, we noticed that the bureaucracy we were all used to was getting in the way of adaptability,” says John Bunch, who was brought on to advise Zappos CEO Tony Hsieh.

Zappos is by far the largest company to adopt this new model. Years ago, I can remember hearing about consulting firms approaching a model with some of the same elements, but not to the degree of Zappos. A flatter organization like this could lead to innovation and keep Zappos from creating silos. Even with these benefits, I’ve had my concerns.

My biggest concern for Zappos is created from one of the benefits. As people adjust to the teams of a holacracy, you will have employees that will find niches that are nearly impossible to replace. People will fill positions without titles, but with skills that aren’t typically found together in a traditional recruiting approach. Replacing employees following turnover would not only be incredible difficult, but also incredibly costly. The new recruiting strategy Zappos is rolling out to find new employee in a huge step in the right direction towards a solution.

Rather than using typical job posting boards like Monster and Career Builder, Zappos has created a social network for its candidates. Positions won’t be posted the way they typically are, but rather candidates will have to talk to the teams they want to join. In the blog entry posted today on the Zappos website, the post states,

” Instead of posting jobs, we are simply asking people to find a department they are interested in and make an introduction. By introducing themselves, people get to become a Zappos Insider and can actually… you know… talk to us.”

Zappos is going to have the opportunity moving forward to get a better feel for fit of potential employees before they even come in for an interview. They’ll have an easier time being able to find the right applicants and free up their recruiters to work on strategies to retain some of their current employees as they continue to try to expand.

I look forward to watching Zappos expand. I want to see how their new recruiting model will work in practice. I’m not sure how long it will take before it makes a significant impact at Zappos, but I think it is an incredible opportunity to be one step ahead of their competition and I applaud them. Who knows, they may be creating the recruiting model of the future.